November 1, 2017 / 5:01 PM / a year ago

Caterpillar dealer to open shop in Cuba special development zone

HAVANA, Nov 1 (Reuters) - Rimco, Caterpillar Inc’s dealer for Cuba, said on Wednesday it would open a distribution center for the U.S. heavy equipment maker at Havana’s Mariel special development zone.

The deal, signed this week, came as worsening U.S.-Cuban political relations are curbing U.S. business interest in the Communist-run island of 11 million inhabitants in the wake of the historic 2014 detente.

The United States has said it would vote against a U.N. General Assembly resolution on Wednesday calling for the lifting of the decades-old U.S. economic embargo against Cuba, reversing an abstention by Washington last year.

“We are going to set up a warehouse and distribution center at Mariel and we will be distributing Caterpillar equipment,” Rimco Vice President Caroline McConnie said in a news conference at Cuba’s annual trade fair. “We have a license from the commerce department and other agencies.”

A license from the Treasury Department’s Office of Foreign Assets Control (OFAC), which handles economic and trade sanctions, was not necessary, she said.

Mariel Director Ana Teresa Igarza said at the news conference that Rimco hoped to open shop in 2018, and the deal was one of 30 projects, including 11 Mariel had signed off on this year.

Cuba created the zone three years ago to attract foreign capital with tax and customs breaks to boost its anemic economy.

It is controlled by Almacenes Universales, a company belonging to the Armed Forces Business Enterprises Group (GAESA), which could prove problematic for U.S. companies. U.S. President Donald Trump in June ordered a ban on business dealings with the military as part of a tightening of trade and travel restrictions.

The new regulations, including that ban, have yet to be unveiled. The Trump administration has said that any deals signed before then would be grandfathered in. (Reporting by Marc Frank; Writing by Sarah Marsh; Editing by Richard Chang)

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